How will the debt problems of AI projects be solved, for example, Oracle is already facing a shortage of cash?

For now, the problem will be solved with new money: take out new loans, cover old debts with them, postpone payment deadlines and negotiate with creditors on changing conditions.

If the AI debt becomes large enough and future cash flows prove insufficient to service it, the problem cannot be eliminated, but can only be stretched over time: through refinancing, term extensions, restructuring, and asset revaluation. In the event of a large-scale crisis, this will avoid simultaneous recognition of all losses, but some of the losses will still have to be recognized eventually.

The AI boom may not necessarily end with the bankruptcies of technology giants. It is much more likely that if there is a serious disappointment in profitability, a long process of redistributing losses will begin through refinancing, restructuring and revaluation of assets. If the scale turns out to be large enough, some of the losses may eventually fall on pension funds, because they are large holders of long-term financial assets. Eventually, someone will have to write off some of the debt anyway. And then the main question will not be how much money was printed, but who suffered the final loss: shareholders, banks, bondholders, private credit, pension funds or the state.

Why is artificial intelligence positioned as a threat?

Positioning AI as a threat allows you to increase sales and accelerate the adoption of AI, despite any prohibitions.

If the same phenomenon is presented to a person as a threat or as an opportunity, the threat causes a more intense and energetic reaction. When visionary leaders and technologists notice a disruptive process, they warn of an impending threat: the company may die if the technology brings success to its competitors. The threat must be eliminated: the company must implement the technology itself and allocate resources for its development or purchase.

It is necessary to convince top management to take the problem seriously, and for this it is necessary to present innovative technology as a threat in the resource allocation planning process. Then responsibility for the implementation of the project must be transferred to an outside, autonomous organizational unit, which will perceive it solely as an opportunity. This is exactly what marketing departments and the media are doing now, namely positioning AI as a threat and later as a solution.

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What is an Omicron stamp?

On November 24, 2021, South Africa reported the identification of a new COVID-19 variant, B.1.1.529, to the World Health Organization (WHO). B.1.1.529 was first detected in specimens collected on November 11, 2021 in Botswana and on November 14, 2021 in South Africa.